Rose Goslinga helps Kenyan farmers mitigate risk with microinsurance

Kilimo Salama, Kenya’s largest microinsurance program and Swahili for “safe farming”, was developed for farmers to mitigate the risks of weather’s unpredictability, enabling them to take chances to safely grow their businesses. Farmers obtain Kilimo Salama insurance two ways: via retail or microfinance institutions. When purchased over-the-counter at the same place when they buy seed or fertilizer, a stockist scans a code with all relevant product information via a phone’s camera; then s/he selects the weather station closest to the farmer’s fields, which determines the payout should insurance be collected. The stockist enters the farmer’s mobile number and sends the registration to a Kilimo Salama server. A text message sent to the farmer provides him with his policy number and insurance confirmation. The other way farmers access microinsurance is through more compulsory means – microfinance institutions include it in the loans provided to farmers so that if there’s a drought, the farmers won’t have trouble paying back their loans.

PopTech spoke with Rose Goslinga, a 2010 Social Innovation Fellow and the Syngenta Foundation’s coordinator for Kilimo Salama, to hear more about how she learned from early mistakes, how Kilimo Salama is impacting the livelihoods of newly insured farmers and where the program needs to go in order to become truly viable.

PopTech: Kilimo Salama’s third season begins this March and the program has grown significantly to 12,000 participating farmers since it launched with 200 farmers in 2009. You must be doing something right.
Rose Goslinga: Actually, there are a lot of things we tried that didn’t work out, which we’re continuing to learn from. For instance, in our first pilot, we put together a packet for farmers where they could buy eight kilograms of seeds, herbicide and fertilizer and then they’d get insurance for free. One of my [insurance] sellers told me, “Rose, farmers who go for things that are free are not serious farmers so you’re never going to attract the right farmers if you’re going to give something that’s free. People are going to think this is a joke."

PT: Sounds like worthwhile advice – people do tend to place more value on something when it isn’t a handout. What else did you learn?
RG: We were basically telling farmers they should insure a package, which was tailored to fit one acre of maize. Some farmers said, “I actually only grow half an acre of maize so what do I do?” and there was no option for them. Actually, the option was for him to find another guy with another half acre and share the insurance together. Some of them did that and it worked fine but sometimes the main registered person would not tell the other farmer that he got a payout. If you have one window for people to cheat they will use it.

PT: Anything else about the program you’ve updated since the first pilot?
RG: Before Kilimo Salama, farmers had created their own risk mitigation strategy by basically growing three or four varieties of maize on their one acre: one short-maturing variety in case it doesn’t rain, a medium-maturing variety which takes a bit longer and needs more rain, and a long-maturing, high yielding variety just because. He’s not gambling, but he knows that farming is risky.

The package we initially built required that they buy the same type of seed. That was wrong because that’s not the way farmers work. We needed to build a very flexible package where they can decide what they want to insure.

PT: How did you get farmers to trust the program?
RG: At first the farmers don’t trust insurance, but they do want to try it out. So they try it with a small amount of seed and then you have to show them: You should look at your farm like a business. If you invest in your crop then you should also be prudent and take out insurance. We’ve had to market this, talk on the radio, have field days.

PT: What’s a field day?
RG: I am driving home from a field day today where we had about four hundred farmers who were being taught a whole range of things regarding their finances – including insurance. At the end of the ceremony, I rewarded three farmers who bought insurance over two consecutive seasons because they’re loyal customers. We wanted to say, “These are farmers who have bought the product. And you should become one of those farmers as well.” It’s old school marketing stuff.

PT: Are there any stories about farmers who have benefited from the program?
RG: Actually this is pretty funny. We started hearing from farmers in one area who said their Kilimo Salama maize was growing better than their non-insured maize.

And we were like, that doesn’t make any sense at all. They even sent us a picture showing their normal maize, which was smaller then the Kilimo Salama maize. We asked them – is this the first time you used fertilizer or certified seed? They said no. We tried to find out the difference, but we couldn’t figure it out.

PT: So what do you think was actually going on there?
RG: It’s basically having this kind of assurance that whatever happens you’re going to get at least your seeds or your fertilizer or input investment back which basically they said made them feel comfortable. It makes them take a bit more risk.

What you’re selling with insurance is peace of mind. I look at this as – actually farmers have a lot of potential but given weather circumstances and all the risks involved in farming, they don’t really fulfill their full potential. We help them do that.

PT: Why did you decide to start this program in Kenya?
RG: M-PESA was the main reason we picked Kenya. Everybody has an M-PESA account in Kenya, which means all of a sudden everybody has a bank account. Now we can send money, even really small amounts, via SMS to individual people.

PT: It seems like the program is meeting a huge need and has the potential to change the way farmers think about their crops and livelihoods. How are you measuring the program’s success?
RG: We measure it in retention rates – for example, how many farmers sign up year after year. And of those farmers, how much do they increase their insurance sum? For example, in the first year, do they ensure a bag of maize? And in the second year, do they insure a bag of maize and a bag of fertilizer? We measure success in terms of how the program grows. For example, are people telling each other about the program and are we seeing increased sign-up rates?

PT: But you still feel like you’ve got a ways to go?
RG: We are currently the biggest microinsurance program in Africa. With 12,000 farmers, I think that’s absolutely pathetic because it’s so small. Insurance programs need to have 200,000-300,000 customers to be economically viable in the long term so we really have a long way to go until we’ll there. But that’s really what we’re going for.

For more information about Kilimo Salama, check out this video about the program:

This interview has been edited and condensed.

Image: Kilimo Salama

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